JetBlue posts 2Q loss, but beats Wall St. estimate

Shares jumped 80 cents, or 20.7 percent, to $4.69 in midday trading. The stock has ranged from $3.04 to $11.38 in the past year.

JetBlue posted a loss of $7 million, or 3 cents per share, compared with a year-ago profit of $21 million, or 11 cents per share.

Revenue rose 18 percent, to $859 million, from $730 million a year earlier.

Analysts expected a loss of 7 cents per share, on revenue of $856 million, according to a Thomson Financial poll.

Saying the industry faces "unprecedented challenges," the Forest Hills, N.Y.-based carrier said it will suspend its near-term growth plans beginning in September.

JetBlue expects September capacity to be down 10 percent and does not expect to grow next year. JetBlue thinks capacity will slip one to three percent in the third quarter and fall six to nine percent in the fourth quarter.

The airline also said it will defer delivery of 10 Embraer 190 jets to 2016. They were originally scheduled for delivery between 2009 and 2011.

In late May, JetBlue announced plans to put off buying 21 new Airbus jetliners for four or five years.

The company added it will halt operations in Ontario, Calif., as of Sept. 3. JetBlue did not specify how many workers will be affected by the move. Ontario, about 35 miles east of downtown Los Angeles, was the company's first location on the West Coast when it began flying in 2001.

JetBlue said it plans to focus more on shorter north-south flights and reduce its transcontinental routes, which use more fuel.

The company stopped flying out of Tucson, Ariz., Columbus, Ohio, and Nashville, Tenn., earlier this year and delayed plans to serve Los Angeles. It added new service to parts of the Caribbean and earlier this week said it will begin flying between Portland, Ore., and Long Beach, Calif.

"The dramatic rise in fuel prices has forced us to make the difficult decision to discontinue operations in Ontario," said CEO Dave Barger. "While we understand the impact this decision has on our customers and our crew members, we need to make appropriate network adjustments to better match our capacity with customer demand."

Barger said the plans are part of a strategy to adapt to a "new normal"--an industry forced to adjust through major obstacles as the price of jet fuel continues to rise.

The company paid 64 percent more for fuel in the second quarter than it did in the same quarter of 2007.

Meanwhile, JetBlue Chief Executive Dave Barger said the company's gains from extra fees it is charging passengers have helped partially offset soaring costs.

The carrier expects it will bring in about $40 million from customers buying seats with extra leg room this year. Its $15 fee for a second checked bag is expected to translate into about $20 million in additional revenue. A ticket change fee, which doubled to $100 in the second quarter, is part of a "basket of fee changes" expected to produce about $50 million in extra revenue in 2008.

JetBlue also said Tuesday it secured a $110 million line of credit with Citigroup Global Markets Inc. to fund working capital and other general corporate purposes. The credit facility, which expires next July, is partially secured by JetBlue's auction rate securities.